Forex reserves gain $455M in one week amid intervention

The nation's foreign exchange reserves sustained a 13-month weekly winning streak, adding $455 million in one week despite interventions in the market, shoring it up to $34.82 billion. The development signals an assurance of Nigeria's ability to honour its international obligations and a boost to foreign investors, who took a flight to safety in the wake of the country's foreign currency earning crisis caused by oil price volatility. 

It is also renewing confidence that the 2018 forex reserves target of the Central Bank of Nigeria (CBN) put at $40 billion is achievable, as the apex bank steps up its management of forex earnings. This is coming just as the country expects the inflow of proceeds of the $3 billion Eurobond that was oversubscribed by about $11 billion and split across 10-year and 30-year tranches at issuance yield of 6.5 per cent and 7.625 per cent, respectively. 

The rise in the stock of foreign reserves' was recorded despite series of interventions by CBN in recent times to support the local currency, especially as it auctioned $210 million last one week. Consequently, the naira has maintained stability against the major currencies as data showed that the exchange rates across segments have oscillated between N359.98 and N364 in all trading days. At the popular investor's platform (I&E Window), the rate closed at N360.65 per dollar, while turnover averaged $114.07 million daily, according to data from the FMDQ OTC Securities. 

(Guardian)